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Special UN Report: Biofuels Impact Food Prices and Availability

A new report from the High Level Panel of Experts on Food Security and Nutrition (HLPE) out of Rome, for the United Nations, implicates biofuels as a cause of high food prices. The June 2013 report, released today, is titled, “Biofuels and food security” (PDF). This comprehensive document includes many interesting graphics and it attempts to cover all aspects of biofuels production.

Every-so-often I catch a headline or tweet from biofuels interest groups or lobbyists who periodically promote the story that biofuels do not contribute to high food prices. This document clearly states that they do. While the ripple effect of the production and consumption of biofuels is far-reaching and can even account for some increased income for small-shareholder farmers, they are being promoted especially by corporate agricultural interests.

Just this week DuPont received much feel-good publicity in promoting their food, agriculture and alternative energy “innovation center” in Johnston, Iowa, where their Pioneer Hi-Bred business unit is located. What was (at least part of) the hoopla really about? Making cellulosic ethanol out of corn stover.

Taxpayers are on the hook for funding second generation biofuels, by the way, and cellulosic ethanol from corn stover qualifies. Follow the money. Currently, in the EU, biofuels policies are being rewritten, and the biofuels industry there, just like it does here, is lobbying hard against new proposals before the Parliament and Council to limit the use of food crops for biofuels.

Here are a few chosen, key statements from the United Nation’s report:

1. In the last few years (since 2004) of short-term commodity food price increase, biofuels did play an important role.
2. All crops compete for the same land or water, labour, capital, inputs and investment and there are no current magic non-food crops that can ensure more harmonious biofuel production on marginal lands. Therefore, non-food/feedcrops should be assessed with the same rigour as food/feedcrops for their direct and indirect food security impacts.
3. In the case of the US, the impact on food security is essentially through the global transmission of prices.
4. (O)n the technological frontier for biofuels, few … countries have the resources to move forward to second-generation biofuels, given the often proprietary nature of this technology, the elevated capital investments required, and the high demands that second-generation technologies make on infrastructure, logistics and human capital.
5. (I)ndustrial advances can take place more quickly than agronomic advances needed to lower feedstock costs of both conventional and advanced biofuels.
6. Given the increasing price of fossil fuels and more efficient production, biofuels, or at least some of them, will be competitive even without public support. Increasingly it will be the market rather than policies that will drive the development of the sector.
7. Biofuel development has both global and local effects, positive and negative, short and long term. Many of these effects take the form of increased competition, for food, for land, for water. There are links between biofuels and food security. Therefore biofuel policies have to integrate food security as a major concern.

Included was a good summary of how corn ethanol in the U.S. has impacted other commodities:

The US has historically been both the world’s leading producer and exporter of corn, responsible for as much as 50 percent of world trade. The share of US corn production directed to ethanol increased in one decade from less than 10 percent to over 40 percent in the 2010/11 crop year, and remained at that high level in 2011/2012. Not only did the US exports and share in international corn trade decline as a result, but a significant part of the expansion of corn production in the US came at the expense of other major global crops, including soybeans. This was seen to have two effects: an increase in the price of corn and of its close substitutes like wheat on world markets, and a stimulation of food and feed production in other regions of the world, at the same time as major quantities of corn were subtracted from the feed market.

This next chart shows us how policy of individual nations affects trade and consumption of biofuels.

I also wanted to include the chart from the report with EROI (net energy return on investments) values from various feedstocks, but when I looked at their numbers, they looked quite “off” to me, so I am not including it here. Unfortunately, EROI numbers, while important, fluctuate wildly and are difficult to obtain and keep current, I suppose.

The report lists the environmental sustainability concerns of biofuels, one of my own major concerns, below.

1. Lifecycle GHG emmisions.
2. Soil quality.
3. Harvest levels of wood resources.
4. Emissions of non-GHG air pollutants, including air toxics.
5. Water use and efficiency.
6. Water quality.
7. Biological diversity in the landscape.
8. Land use and land-use change related to bioenergy feedstock production.

Certainly, here in the U.S., we have seen large negative impacts on all of the items on this list, making a project such as corn ethanol production insanely unsustainable and destructive to our environment in its current policy form.

However, the ILUC hypothesis relied on here and promoted by one of the authors for over five years now has been questioned all that time but, not advanced and lately largely disproved by the modelling. ILUC factors used by the European Commission in its recent Proposal were inconclusive and vary considerably, according to a study by the French National Institute for Agricultural Research (INRA). Respected modeller Alexandre GOHIN compared the different models used, and how these models rely on flawed assumptions, including use of very low values for increasing yields of cultivated areas in the EU ( prodinra.inra.fr/ft?id=%7B7858309A-82DB-4D52-9B5C-966887EBDEC3%7D )

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